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Hanna: Off Label Marketing

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(Host) Recently, the Second Circuit Court of Appeals handed a big win to pharmaceutical companies to market their drugs for off-label uses. Commentator and Vermont Law School Professor Cheryl Hanna says the case might have implications for Vermont's ability to regulate corporations.

http://www.vpr.net//audio/programs/56/2013/03/Hanna-0312_031213_Cheryl Hanna.mp3

(Hanna) Albert Caronia was a pharmaceutical salesperson promoting a drug called Xyrem, approved by the FDA to treat narcolepsy.

Doctors are free to prescribe drugs, including Xyrem, for uses not approved by the FDA, and off-label uses are widely practiced. But, the FDA forbids drug manufacturers from marketing their drugs for off-label uses - called misbranding - and offenders face criminal penalties as well as significant fines.

Caronia got into trouble when the government secretly recorded him and a company doctor promoting Xyrem for off-label uses, including treating fibromyalgia. Caronia was convicted of conspiracy to misbrand the drug.

He appealed, arguing that the First Amendment prohibits the government from prohibiting speech that is truthful, not misleading, and is simply informing doctors of a use that would otherwise be legal.

The Second Circuit reversed the conviction on narrow grounds, but nevertheless has made it harder for government to regulate commercial speech.

Until a few years ago,it was assumed that the government could restrict commercial speech for a good reason. For example, the FDA argued that if Caronia could encourage doctors to use Xyrem for other purposes, the FDA approval process would be hindered and patients could be harmed.

But then came Sorrell v. IMS, the 2011 case from Vermont in which the US Supreme Court struck down a law prohibiting pharmaceutical companies from data mining physician prescriptions to enhance their sales. The court found that speech in the aid of pharmaceutical marketing was protected under the First Amendment.

The Second Circuit relied heavily on that decision when deciding Caronia. Just like in Vermont's case, the government was restricting the speech of pharmaceutical companies without justification. Doctors could legal prescribe Xyrem for fibromyalgia, so a drug representative could talk about it.

Its been reported that the FDA will not appeal the decision. It has decided to wait to see what other circuits might do before risking a huge loss before the Supreme Court that could undermine the entire way we regulate drugs.

Three lessons can be learned from Caronia: First, the legislature needs to be careful what it wishes for. Vermont had hoped to protect physician privacy, but the IMS case ended up doing more harm than good. The law was over-reaching, and in response the Supreme Court gave even greater protections for corporate speech than it needed to.

Second,the Second Circuit remains a dangerous place for government regulators.Lawmakers should at least be aware that our circuit may not be the best place to test laws aimed at protecting consumers, but that also implicate the First Amendment.

Finally, Caronia is just another example of the federal courts granting greater speech rights to corporations. You may agree or disagree with that position, but it is a trend that is likely to continue.